§ 1a. — Definitions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1a]
TITLE 7--AGRICULTURE
CHAPTER 1--COMMODITY EXCHANGES
Sec. 1a. Definitions
As used in this chapter:
(1) Alternative trading system
The term ``alternative trading system'' means an organization,
association, or group of persons that--
(A) is registered as a broker or dealer pursuant to section
15(b) of the Securities Exchange Act of 1934 [15 U.S.C. 78o(b)]
(except paragraph (11) thereof);
(B) performs the functions commonly performed by an exchange
(as defined in section 3(a)(1) of the Securities Exchange Act of
1934 [15 U.S.C. 78c(a)(1)]);
(C) does not--
(i) set rules governing the conduct of subscribers other
than the conduct of such subscribers' trading on the
alternative trading system; or
(ii) discipline subscribers other than by exclusion from
trading; and
(D) is exempt from the definition of the term ``exchange''
under such section 3(a)(1) [15 U.S.C. 78c(a)(1)] by rule or
regulation of the Securities and Exchange Commission on terms
that require compliance with regulations of its trading
functions.
(2) Board of trade
The term ``board of trade'' means any organized exchange or
other trading facility.
(3) Commission
The term ``Commission'' means the Commodity Futures Trading
Commission established under section 2(a)(2) of this title.
(4) Commodity
The term ``commodity'' means wheat, cotton, rice, corn, oats,
barley, rye, flaxseed, grain sorghums, mill feeds, butter, eggs,
Solanum tuberosum (Irish potatoes), wool, wool tops, fats and oils
(including lard, tallow, cottonseed oil, peanut oil, soybean oil,
and all other fats and oils), cottonseed meal, cottonseed, peanuts,
soybeans, soybean meal, livestock, livestock products, and frozen
concentrated orange juice, and all other goods and articles, except
onions as provided in section 13-1 of this title, and all services,
rights, and interests in which contracts for future delivery are
presently or in the future dealt in.
(5) Commodity pool operator
The term ``commodity pool operator'' means any person engaged in
a business that is of the nature of an investment trust, syndicate,
or similar form of enterprise, and who, in connection therewith,
solicits, accepts, or receives from others, funds, securities, or
property, either directly or through capital contributions, the sale
of stock or other forms of securities, or otherwise, for the purpose
of trading in any commodity for future delivery on or subject to the
rules of any contract market or derivatives transaction execution
facility, except that the term does not include such persons not
within the intent of the definition of the term as the Commission
may specify by rule, regulation, or order.
(6) Commodity trading advisor
(A) In general
Except as otherwise provided in this paragraph, the term
``commodity trading advisor'' means any person who--
(i) for compensation or profit, engages in the business
of advising others, either directly or through publications,
writings, or electronic media, as to the value of or the
advisability of trading in--
(I) any contract of sale of a commodity for future
delivery made or to be made on or subject to the rules
of a contract market or derivatives transaction
execution facility;
(II) any commodity option authorized under section
6c of this title; or
(III) any leverage transaction authorized under
section 23 of this title; or
(ii) for compensation or profit, and as part of a
regular business, issues or promulgates analyses or reports
concerning any of the activities referred to in clause (i).
(B) Exclusions
Subject to subparagraph (C), the term ``commodity trading
advisor'' does not include--
(i) any bank or trust company or any person acting as an
employee thereof;
(ii) any news reporter, news columnist, or news editor
of the print or electronic media, or any lawyer, accountant,
or teacher;
(iii) any floor broker or futures commission merchant;
(iv) the publisher or producer of any print or
electronic data of general and regular dissemination,
including its employees;
(v) the fiduciary of any defined benefit plan that is
subject to the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1001 et seq.);
(vi) any contract market or derivatives transaction
execution facility; and
(vii) such other persons not within the intent of this
paragraph as the Commission may specify by rule, regulation,
or order.
(C) Incidental services
Subparagraph (B) shall apply only if the furnishing of such
services by persons referred to in subparagraph (B) is solely
incidental to the conduct of their business or profession.
(D) Advisors
The Commission, by rule or regulation, may include within
the term ``commodity trading advisor'', any person advising as
to the value of commodities or issuing reports or analyses
concerning commodities if the Commission determines that the
rule or regulation will effectuate the purposes of this
paragraph.
(7) Contract of sale
The term ``contract of sale'' includes sales, agreements of
sale, and agreements to sell.
(8) Cooperative association of producers
The term ``cooperative association of producers'' means any
cooperative association, corporate, or otherwise, not less than 75
percent in good faith owned or controlled, directly or indirectly,
by producers of agricultural products and otherwise complying with
sections 291 and 292 of this title, including any organization
acting for a group of such associations and owned or controlled by
such associations, except that business done for or with the United
States, or any agency thereof, shall not be considered either member
or nonmember business in determining the compliance of any such
association with this chapter.
(9) Derivatives clearing organization
(A) In general
The term ``derivatives clearing organization'' means a
clearinghouse, clearing association, clearing corporation, or
similar entity, facility, system, or organization that, with
respect to an agreement, contract, or transaction--
(i) enables each party to the agreement, contract, or
transaction to substitute, through novation or otherwise,
the credit of the derivatives clearing organization for the
credit of the parties;
(ii) arranges or provides, on a multilateral basis, for
the settlement or netting of obligations resulting from such
agreements, contracts, or transactions executed by
participants in the derivatives clearing organization; or
(iii) otherwise provides clearing services or
arrangements that mutualize or transfer among participants
in the derivatives clearing organization the credit risk
arising from such agreements, contracts, or transactions
executed by the participants.
(B) Exclusions
The term ``derivatives clearing organization'' does not
include an entity, facility, system, or organization solely
because it arranges or provides for--
(i) settlement, netting, or novation of obligations
resulting from agreements, contracts, or transactions, on a
bilateral basis and without a central counterparty;
(ii) settlement or netting of cash payments through an
interbank payment system; or
(iii) settlement, netting, or novation of obligations
resulting from a sale of a commodity in a transaction in the
spot market for the commodity.
(10) Electronic trading facility
The term ``electronic trading facility'' means a trading
facility that--
(A) operates by means of an electronic or telecommunications
network; and
(B) maintains an automated audit trail of bids, offers, and
the matching of orders or the execution of transactions on the
facility.
(11) Eligible commercial entity
The term ``eligible commercial entity'' means, with respect to
an agreement, contract or transaction in a commodity--
(A) an eligible contract participant described in clause
(i), (ii), (v), (vii), (viii), or (ix) of paragraph (12)(A)
that, in connection with its business--
(i) has a demonstrable ability, directly or through
separate contractual arrangements, to make or take delivery
of the underlying commodity;
(ii) incurs risks, in addition to price risk, related to
the commodity; or
(iii) is a dealer that regularly provides risk
management or hedging services to, or engages in market-
making activities with, the foregoing entities involving
transactions to purchase or sell the commodity or derivative
agreements, contracts, or transactions in the commodity;
(B) an eligible contract participant, other than a natural
person or an instrumentality, department, or agency of a State
or local governmental entity, that--
(i) regularly enters into transactions to purchase or
sell the commodity or derivative agreements, contracts, or
transactions in the commodity; and
(ii) either--
(I) in the case of a collective investment vehicle
whose participants include persons other than--
(aa) qualified eligible persons, as defined in
Commission rule 4.7(a) (17 CFR 4.7(a));
(bb) accredited investors, as defined in
Regulation D of the Securities and Exchange
Commission under the Securities Act of 1933 [15
U.S.C. 77a et seq.] (17 CFR 230.501(a)), with total
assets of $2,000,000; or
(cc) qualified purchasers, as defined in section
2(a)(51)(A) of the Investment Company Act of 1940
[15 U.S.C. 80a-2(a)(51)(A)];
in each case as in effect on December 21, 2000, has, or is
one of a group of vehicles under common control or
management having in the aggregate, $1,000,000,000 in
total assets; or
(II) in the case of other persons, has, or is one of
a group of persons under common control or management
having in the aggregate, $100,000,000 in total assets;
or
(C) such other persons as the Commission shall determine
appropriate and shall designate by rule, regulation, or order.
(12) Eligible contract participant
The term ``eligible contract participant'' means--
(A) acting for its own account--
(i) a financial institution;
(ii) an insurance company that is regulated by a State,
or that is regulated by a foreign government and is subject
to comparable regulation as determined by the Commission,
including a regulated subsidiary or affiliate of such an
insurance company;
(iii) an investment company subject to regulation under
the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.)
or a foreign person performing a similar role or function
subject as such to foreign regulation (regardless of whether
each investor in the investment company or the foreign
person is itself an eligible contract participant);
(iv) a commodity pool that--
(I) has total assets exceeding $5,000,000; and
(II) is formed and operated by a person subject to
regulation under this chapter or a foreign person
performing a similar role or function subject as such to
foreign regulation (regardless of whether each investor
in the commodity pool or the foreign person is itself an
eligible contract participant);
(v) a corporation, partnership, proprietorship,
organization, trust, or other entity--
(I) that has total assets exceeding $10,000,000;
(II) the obligations of which under an agreement,
contract, or transaction are guaranteed or otherwise
supported by a letter of credit or keepwell, support, or
other agreement by an entity described in subclause (I),
in clause (i), (ii), (iii), (iv), or (vii), or in
subparagraph (C); or
(III) that--
(aa) has a net worth exceeding $1,000,000; and
(bb) enters into an agreement, contract, or
transaction in connection with the conduct of the
entity's business or to manage the risk associated
with an asset or liability owned or incurred or
reasonably likely to be owned or incurred by the
entity in the conduct of the entity's business;
(vi) an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1001 et
seq.), a governmental employee benefit plan, or a foreign
person performing a similar role or function subject as such
to foreign regulation--
(I) that has total assets exceeding $5,000,000; or
(II) the investment decisions of which are made by--
(aa) an investment adviser or commodity trading
advisor subject to regulation under the Investment
Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) or
this chapter;
(bb) a foreign person performing a similar role
or function subject as such to foreign regulation;
(cc) a financial institution; or
(dd) an insurance company described in clause
(ii), or a regulated subsidiary or affiliate of such
an insurance company;
(vii)(I) a governmental entity (including the United
States, a State, or a foreign government) or political
subdivision of a governmental entity;
(II) a multinational or supranational government entity;
or
(III) an instrumentality, agency, or department of an
entity described in subclause (I) or (II);
except that such term does not include an entity,
instrumentality, agency, or department referred to in
subclause (I) or (III) of this clause unless (aa) the
entity, instrumentality, agency, or department is a person
described in clause (i), (ii), or (iii) of paragraph (11)(A)
of this section; (bb) the entity, instrumentality, agency,
or department owns and invests on a discretionary basis
$25,000,000 or more in investments; or (cc) the agreement,
contract, or transaction is offered by, and entered into
with, an entity that is listed in any of subclauses (I)
through (VI) of section 2(c)(2)(B)(ii) of this title;
(viii)(I) a broker or dealer subject to regulation under
the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)
or a foreign person performing a similar role or function
subject as such to foreign regulation, except that, if the
broker or dealer or foreign person is a natural person or
proprietorship, the broker or dealer or foreign person shall
not be considered to be an eligible contract participant
unless the broker or dealer or foreign person also meets the
requirements of clause (v) or (xi);
(II) an associated person of a registered broker or
dealer concerning the financial or securities activities of
which the registered person makes and keeps records under
section 15C(b) or 17(h) of the Securities Exchange Act of
1934 (15 U.S.C. 78o-5(b), 78q(h));
(III) an investment bank holding company (as defined in
section 17(i) of the Securities Exchange Act of 1934 (15
U.S.C. 78q(i)); \1\
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\1\ So in original. The semicolon probably should be preceded by an
additional closing parenthesis.
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(ix) a futures commission merchant subject to regulation
under this chapter or a foreign person performing a similar
role or function subject as such to foreign regulation,
except that, if the futures commission merchant or foreign
person is a natural person or proprietorship, the futures
commission merchant or foreign person shall not be
considered to be an eligible contract participant unless the
futures commission merchant or foreign person also meets the
requirements of clause (v) or (xi);
(x) a floor broker or floor trader subject to regulation
under this chapter in connection with any transaction that
takes place on or through the facilities of a registered
entity or an exempt board of trade, or any affiliate
thereof, on which such person regularly trades; or
(xi) an individual who has total assets in an amount in
excess of--
(I) $10,000,000; or
(II) $5,000,000 and who enters into the agreement,
contract, or transaction in order to manage the risk
associated with an asset owned or liability incurred, or
reasonably likely to be owned or incurred, by the
individual;
(B)(i) a person described in clause (i), (ii), (iv), (v),
(viii), (ix), or (x) of subparagraph (A) or in subparagraph (C),
acting as broker or performing an equivalent agency function on
behalf of another person described in subparagraph (A) or (C);
or
(ii) an investment adviser subject to regulation under the
Investment Advisers Act of 1940 [15 U.S.C. 80b-1 et seq.], a
commodity trading advisor subject to regulation under this
chapter, a foreign person performing a similar role or function
subject as such to foreign regulation, or a person described in
clause (i), (ii), (iv), (v), (viii), (ix), or (x) of
subparagraph (A) or in subparagraph (C), in any such case acting
as investment manager or fiduciary (but excluding a person
acting as broker or performing an equivalent agency function)
for another person described in subparagraph (A) or (C) and who
is authorized by such person to commit such person to the
transaction; or
(C) any other person that the Commission determines to be
eligible in light of the financial or other qualifications of
the person.
(13) Excluded commodity
The term ``excluded commodity'' means--
(i) an interest rate, exchange rate, currency, security,
security index, credit risk or measure, debt or equity
instrument, index or measure of inflation, or other
macroeconomic index or measure;
(ii) any other rate, differential, index, or measure of
economic or commercial risk, return, or value that is--
(I) not based in substantial part on the value of a
narrow group of commodities not described in clause (i); or
(II) based solely on one or more commodities that have
no cash market;
(iii) any economic or commercial index based on prices,
rates, values, or levels that are not within the control of any
party to the relevant contract, agreement, or transaction; or
(iv) an occurrence, extent of an occurrence, or contingency
(other than a change in the price, rate, value, or level of a
commodity not described in clause (i)) that is--
(I) beyond the control of the parties to the relevant
contract, agreement, or transaction; and
(II) associated with a financial, commercial, or
economic consequence.
(14) Exempt commodity
The term ``exempt commodity'' means a commodity that is not an
excluded commodity or an agricultural commodity.
(15) Financial institution
The term ``financial institution'' means--
(A) a corporation operating under the fifth undesignated
paragraph of section 25 of the Federal Reserve Act (12 U.S.C.
603), commonly known as ``an agreement corporation'';
(B) a corporation organized under section 25A of the Federal
Reserve Act (12 U.S.C. 611 et seq.), commonly known as an ``Edge
Act corporation'';
(C) an institution that is regulated by the Farm Credit
Administration;
(D) a Federal credit union or State credit union (as defined
in section 1752 of title 12);
(E) a depository institution (as defined in section 1813 of
title 12);
(F) a foreign bank or a branch or agency of a foreign bank
(each as defined in section 3101 of title 12);
(G) any financial holding company (as defined in section
1841 of title 12);
(H) a trust company; or
(I) a similarly regulated subsidiary or affiliate of an
entity described in any of subparagraphs (A) through (H).
(16) Floor broker
The term ``floor broker'' means any person who, in or
surrounding any pit, ring, post, or other place provided by a
contract market or derivatives transaction execution facility for
the meeting of persons similarly engaged, shall purchase or sell for
any other person any commodity for future delivery on or subject to
the rules of any contract market or derivatives transaction
execution facility.
(17) Floor trader
The term ``floor trader'' means any person who, in or
surrounding any pit, ring, post, or other place provided by a
contract market or derivatives transaction execution facility for
the meeting of persons similarly engaged, purchases, or sells solely
for such person's own account, any commodity for future delivery on
or subject to the rules of any contract market or derivatives
transaction execution facility.
(18) Foreign futures authority
The term ``foreign futures authority'' means any foreign
government, or any department, agency, governmental body, or
regulatory organization empowered by a foreign government to
administer or enforce a law, rule, or regulation as it relates to a
futures or options matter, or any department or agency of a
political subdivision of a foreign government empowered to
administer or enforce a law, rule, or regulation as it relates to a
futures or options matter.
(19) Future delivery
The term ``future delivery'' does not include any sale of any
cash commodity for deferred shipment or delivery.
(20) Futures commission merchant
The term ``futures commission merchant'' means an individual,
association, partnership, corporation, or trust that--
(A) is engaged in soliciting or in accepting orders for the
purchase or sale of any commodity for future delivery on or
subject to the rules of any contract market or derivatives
transaction execution facility; and
(B) in or in connection with such solicitation or acceptance
of orders, accepts any money, securities, or property (or
extends credit in lieu thereof) to margin, guarantee, or secure
any trades or contracts that result or may result therefrom.
(21) Hybrid instrument
The term ``hybrid instrument'' means a security having one or
more payments indexed to the value, level, or rate of, or providing
for the delivery of, one or more commodities.
(22) Interstate commerce
The term ``interstate commerce'' means commerce--
(A) between any State, territory, or possession, or the
District of Columbia, and any place outside thereof; or
(B) between points within the same state,\2\ territory, or
possession, or the District of Columbia, but through any place
outside thereof, or within any territory or possession, or the
District of Columbia.
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\2\ So in original. Probably should be capitalized.
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(23) Introducing broker
The term ``introducing broker'' means any person (except an
individual who elects to be and is registered as an associated
person of a futures commission merchant) engaged in soliciting or in
accepting orders for the purchase or sale of any commodity for
future delivery on or subject to the rules of any contract market or
derivatives transaction execution facility who does not accept any
money, securities, or property (or extend credit in lieu thereof) to
margin, guarantee, or secure any trades or contracts that result or
may result therefrom.
(24) Member of a registered entity; member of a derivatives
transaction execution facility
The term ``member'' means, with respect to a registered entity
or derivatives transaction execution facility, an individual,
association, partnership, corporation, or trust--
(A) owning or holding membership in, or admitted to
membership representation on, the registered entity or
derivatives transaction execution facility; or
(B) having trading privileges on the registered entity or
derivatives transaction execution facility.
A participant in an alternative trading system that is designated as
a contract market pursuant to section 7b-1 of this title is deemed a
member of the contract market for purposes of transactions in
security futures products through the contract market.
(25) Narrow-based security index
(A) The term ``narrow-based security index'' means an index--
(i) that has 9 or fewer component securities;
(ii) in which a component security comprises more than 30
percent of the index's weighting;
(iii) in which the five highest weighted component
securities in the aggregate comprise more than 60 percent of the
index's weighting; or
(iv) in which the lowest weighted component securities
comprising, in the aggregate, 25 percent of the index's
weighting have an aggregate dollar value of average daily
trading volume of less than $50,000,000 (or in the case of an
index with 15 or more component securities, $30,000,000), except
that if there are two or more securities with equal weighting
that could be included in the calculation of the lowest weighted
component securities comprising, in the aggregate, 25 percent of
the index's weighting, such securities shall be ranked from
lowest to highest dollar value of average daily trading volume
and shall be included in the calculation based on their ranking
starting with the lowest ranked security.
(B) Notwithstanding subparagraph (A), an index is not a narrow-
based security index if--
(i)(I) it has at least 9 component securities;
(II) no component security comprises more than 30 percent of
the index's weighting; and
(III) each component security is--
(aa) registered pursuant to section 12 of the Securities
Exchange Act of 1934 [15 U.S.C. 78l];
(bb) one of 750 securities with the largest market
capitalization; and
(cc) one of 675 securities with the largest dollar value
of average daily trading volume;
(ii) a board of trade was designated as a contract market by
the Commodity Futures Trading Commission with respect to a
contract of sale for future delivery on the index, before
December 21, 2000;
(iii)(I) a contract of sale for future delivery on the index
traded on a designated contract market or registered derivatives
transaction execution facility for at least 30 days as a
contract of sale for future delivery on an index that was not a
narrow-based security index; and
(II) it has been a narrow-based security index for no more
than 45 business days over 3 consecutive calendar months;
(iv) a contract of sale for future delivery on the index is
traded on or subject to the rules of a foreign board of trade
and meets such requirements as are jointly established by rule
or regulation by the Commission and the Securities and Exchange
Commission;
(v) no more than 18 months have passed since December 21,
2000, and--
(I) it is traded on or subject to the rules of a foreign
board of trade;
(II) the offer and sale in the United States of a
contract of sale for future delivery on the index was
authorized before December 21, 2000; and
(III) the conditions of such authorization continue to
be met; or
(vi) a contract of sale for future delivery on the index is
traded on or subject to the rules of a board of trade and meets
such requirements as are jointly established by rule,
regulation, or order by the Commission and the Securities and
Exchange Commission.
(C) Within 1 year after December 21, 2000, the Commission and
the Securities and Exchange Commission jointly shall adopt rules or
regulations that set forth the requirements under subparagraph
(B)(iv).
(D) An index that is a narrow-based security index solely
because it was a narrow-based security index for more than 45
business days over 3 consecutive calendar months pursuant to clause
(iii) of subparagraph (B) shall not be a narrow-based security index
for the 3 following calendar months.
(E) For purposes of subparagraphs (A) and (B)--
(i) the dollar value of average daily trading volume and the
market capitalization shall be calculated as of the preceding 6
full calendar months; and
(ii) the Commission and the Securities and Exchange
Commission shall, by rule or regulation, jointly specify the
method to be used to determine market capitalization and dollar
value of average daily trading volume.
(26) Option
The term ``option'' means an agreement, contract, or transaction
that is of the character of, or is commonly known to the trade as,
an ``option'', ``privilege'', ``indemnity'', ``bid'', ``offer'',
``put'', ``call'', ``advance guaranty'', or ``decline guaranty''.
(27) Organized exchange
The term ``organized exchange'' means a trading facility that--
(A) permits trading--
(i) by or on behalf of a person that is not an eligible
contract participant; or
(ii) by persons other than on a principal-to-principal
basis; or
(B) has adopted (directly or through another nongovernmental
entity) rules that--
(i) govern the conduct of participants, other than rules
that govern the submission of orders or execution of
transactions on the trading facility; and
(ii) include disciplinary sanctions other than the
exclusion of participants from trading.
(28) Person
The term ``person'' imports the plural or singular, and includes
individuals, associations, partnerships, corporations, and trusts.
(29) Registered entity
The term ``registered entity'' means--
(A) a board of trade designated as a contract market under
section 7 of this title;
(B) a derivatives transaction execution facility registered
under section 7a of this title;
(C) a derivatives clearing organization registered under
section 7a-1 of this title; and
(D) a board of trade designated as a contract market under
section 7b-1 of this title.
(30) Security
The term ``security'' means a security as defined in section
2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) or
section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(10)).
(31) Security future
The term ``security future'' means a contract of sale for future
delivery of a single security or of a narrow-based security index,
including any interest therein or based on the value thereof, except
an exempted security under section 3(a)(12) of the Securities
Exchange Act of 1934 [15 U.S.C. 78c(a)(12)] as in effect on January
11, 1983 (other than any municipal security as defined in section
3(a)(29) of the Securities Exchange Act of 1934 [15 U.S.C.
78c(a)(29)] as in effect on January 11, 1983). The term ``security
future'' does not include any agreement, contract, or transaction
excluded from this chapter under section 2(c), 2(d), 2(f), or 2(g)
of this title (as in effect on December 21, 2000) or sections 27 to
27f of this title.
(32) Security futures product
The term ``security futures product'' means a security future or
any put, call, straddle, option, or privilege on any security
future.
(33) Trading facility
(A) In general
The term ``trading facility'' means a person or group of
persons that constitutes, maintains, or provides a physical or
electronic facility or system in which multiple participants
have the ability to execute or trade agreements, contracts, or
transactions by accepting bids and offers made by other
participants that are open to multiple participants in the
facility or system.
(B) Exclusions
The term ``trading facility'' does not include--
(i) a person or group of persons solely because the
person or group of persons constitutes, maintains, or
provides an electronic facility or system that enables
participants to negotiate the terms of and enter into
bilateral transactions as a result of communications
exchanged by the parties and not from interaction of
multiple bids and multiple offers within a predetermined,
nondiscretionary automated trade matching and execution
algorithm;
(ii) a government securities dealer or government
securities broker, to the extent that the dealer or broker
executes or trades agreements, contracts, or transactions in
government securities, or assists persons in communicating
about, negotiating, entering into, executing, or trading an
agreement, contract, or transaction in government securities
(as the terms ``government securities dealer'', ``government
securities broker'', and ``government securities'' are
defined in section 3(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a))); or
(iii) facilities on which bids and offers, and
acceptances of bids and offers effected on the facility, are
not binding.
Any person, group of persons, dealer, broker, or facility
described in clause (i) or (ii) is excluded from the meaning of
the term ``trading facility'' for the purposes of this chapter
without any prior specific approval, certification, or other
action by the Commission.
(C) Special rule
A person or group of persons that would not otherwise
constitute a trading facility shall not be considered to be a
trading facility solely as a result of the submission to a
derivatives clearing organization of transactions executed on or
through the person or group of persons.
(Sept. 21, 1922, ch. 369, Sec. 1a, as added Pub. L. 102-546, title IV,
Sec. 404(a), Oct. 28, 1992, 106 Stat. 3625; amended Pub. L. 106-554,
Sec. 1(a)(5) [title I, Secs. 101, 123(a)(1)], Dec. 21, 2000, 114 Stat.
2763, 2763A-366, 2763A-405.)
References in Text
The Employee Retirement Income Security Act of 1974, referred to in
pars. (6)(B)(v) and (12)(A)(vi), is Pub. L. 93-406, Sept. 2, 1974, 88
Stat. 829, as amended, which is classified principally to chapter 18
(Sec. 1001 et seq.) of Title 29, Labor. For complete classification of
this Act to the Code, see Short Title note set out under section 1001 of
Title 29 and Tables.
The Securities Act of 1933, referred to in par. (11)(B)(ii)(I)(bb),
is title I of act May 27, 1933, ch. 38, 48 Stat. 74, as amended, which
is classified generally to subchapter I (Sec. 77a et seq.) of chapter 2A
of Title 15, Commerce and Trade. For complete classification of this Act
to the Code, see section 77a of Title 15 and Tables.
The Investment Company Act of 1940, referred to in par.
(12)(A)(iii), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as
amended, which is classified generally to subchapter I (Sec. 80a-1 et
seq.) of chapter 2D of Title 15, Commerce and Trade. For complete
classification of this Act to the Code, see section 80a-51 of Title 15
and Tables.
The Investment Advisers Act of 1940, referred to in par.
(12)(A)(vi)(II)(aa), (B)(ii), is title II of act Aug. 22, 1940, ch. 686,
54 Stat. 847, as amended, which is classified generally to subchapter II
(Sec. 80b-1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For
complete classification of this Act to the Code, see section 80b-20 of
Title 15 and Tables.
The Securities Exchange Act of 1934, referred to in par.
(12)(A)(viii)(I), is act June 6, 1934, ch. 404, 48 Stat. 881, as
amended, which is classified principally to chapter 2B (Sec. 78a et
seq.) of Title 15, Commerce and Trade. For complete classification of
this Act to the Code, see section 78a of Title 15 and Tables.
Section 25A of the Federal Reserve Act, referred to in par. (15)(B),
popularly known as the Edge Act, is classified to subchapter II
(Sec. 611 et seq.) of chapter 6 of Title 12, Banks and Banking. For
complete classification of this Act to the Code, see Short Title note
set out under section 611 of Title 12 and Tables.
Amendments
2000--Par. (1). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 101(2)], added par. (1). Former par. (1) redesignated (2).
Par. (2). Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(3)],
added par. (2) and struck out heading and text of former par. (2). Text
read as follows: ``The term `board of trade' means any exchange or
association, whether incorporated or unincorporated, of persons who are
engaged in the business of buying or selling any commodity or receiving
the same for sale on consignment.''
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)], redesignated
par. (1) as (2). Former par. (2) redesignated (3).
Pars. (3), (4). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 101(1)], redesignated pars. (2) and (3) as (3) and (4),
respectively. Former par. (4) redesignated (5).
Par. (5). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 123(a)(1)(A)], inserted ``or derivatives transaction execution
facility'' after ``contract market''.
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)], redesignated
par. (4) as (5). Former par. (5) redesignated (6).
Par. (6). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 123(a)(1)(A)], inserted ``or derivatives transaction execution
facility'' after ``contract market'' in subpars. (A)(i)(I) and (B)(vi).
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)], redesignated
par. (5) as (6). Former par. (6) redesignated (7).
Pars. (7), (8). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 101(1)], redesignated pars. (6) and (7) as (7) and (8),
respectively. Former par. (8) redesignated (16).
Pars. (9) to (15). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 101(4)], added pars. (9) to (15). Former pars. (9) to (12) and (13)
to (15) redesignated (17) to (20) and (22) to (24), respectively.
Par. (16). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 123(a)(1)(A)], inserted ``or derivatives transaction execution
facility'' after ``contract market'' in two places.
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)], redesignated
par. (8) as (16). Former par. (16) redesignated (28).
Par. (17). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 123(a)(1)(A)], inserted ``or derivatives transaction execution
facility'' after ``contract market'' in two places.
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)], redesignated
par. (9) as (17).
Pars. (18), (19). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 101(1)], redesignated pars. (10) and (11) as (18) and (19),
respectively.
Par. (20). Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)],
redesignated par. (12) as (20).
Par. (20)(A). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 123(a)(1)(A)], inserted ``or derivatives transaction execution
facility'' after ``contract market''.
Par. (21). Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(5)],
added par. (21).
Par. (22). Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)],
redesignated par. (13) as (22).
Par. (23). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 123(a)(1)(A)], inserted ``or derivatives transaction execution
facility'' after ``contract market''.
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)], redesignated
par. (14) as (23).
Par. (24). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 123(a)(1)(B)], substituted ``registered entity'' for ``contract
market'' wherever appearing in heading and text and inserted concluding
provisions.
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(6)], added par.
(24) and struck out heading and text of former par. (24). Text read as
follows: ``The term `member of a contract market' means an individual,
association, partnership, corporation, or trust owning or holding
membership in, or admitted to membership representation on, a contract
market or given members' trading privileges thereon.''
Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)], redesignated
par. (15) as (24).
Pars. (25) to (27). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 101(6)], added pars. (25) to (27).
Par. (28). Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 101(1)],
redesignated par. (16) as (28).
Pars. (29) to (33). Pub. L. 106-554, Sec. 1(a)(5) [title I,
Sec. 101(7)], added pars. (29) to (33).
Effective Date
Section 403 of Pub. L. 102-546 provided that: ``Except as otherwise
specifically provided in this Act [enacting this section and section 12e
of this title, amending sections 2, 2a, 4, 4a, 6 to 6c, 6e to 6g, 6j,
6p, 7 to 9a, 10a, 12, 12a, 12c, 13 to 13c, 15, 16, 18, 19, 21, and 25 of
this title, repealing section 26 of this title, enacting provisions set
out as notes under sections 1a, 4a, 6c, 6e, 6j, 6p, 7a, 13, 16a, 21, and
22 of this title, and repealing provisions set out as a note under
section 4a of this title], this Act and the amendments made by this Act
shall become effective on the date of enactment of this Act [Oct. 28,
1992].''
Section Referred to in Other Sections
This section is referred to in sections 2, 6m, 6o-1, 7, 7a, 7a-1,
7a-2, 27, 27b of this title; title 15 section 78f.
